In fact, this is THE question. The tender is like the holy grail of business, whilst also being a nightmare and a huge headache.
New businesses dream of being able to put in a tender for a job and experienced companies wince at the prospect, for they know that usually the tender creates a amount of admin work, and plenty of headaches although the potential success from winning the tender means a lot of work, often guaranteed for a few years.
However, where many of us fall down, is not knowing when to walk away, for the job itself often isn’t what we had built it up to be.
I’ll state for the record I am talking about tenders for our industry; I have no clue about anyone else’s business because I have never had to complete a tender as a building contractor for example. But as the owner of a PAT testing company I do have some experience of this subject.
If you’re planning to tender for a job, my advice is get advice from a professional first; make sure the job being sold to you will deliver what you expect it to, before you bid.
I have written a number of tender applications in the past few years for establishments ranging from schools to universities, hospitals and other public services. What I have found is this:
- The company writing the tender will want you to answer loads of time consuming questions in great detail
- It doesn’t matter what your answers are as long as they agree to the instructions
- Price is going to be a big swinging point; cheapest usually wins
- It’ll take you a long time to fill in the application
- You usually get no thanks for your application
After you have submitted, and if you’ve been lucky enough to be the winning bidder you’ll find they then expect you to attend meeting after meeting, which weren’t mentioned in the tender application and you won’t be getting paid for. You’ve got no choice but to attend as it’s expected of you.
Once the job begins you will further discover that they want to make changes; on more than one occasion the client has attempted to make changes to the job, such as doing less work (and expecting the invoice to pro-rata), or changing the price, despite a contract having been signed. They’ll use their “I’m bigger than you” attitude to convince you to roll over.
You also find that the client expects you at the point of doing the application to bend over backwards in what you’ll offer them as ‘free extras’ such as implementing training, or running repairs, on top of the already heavily discounted service you offer. Don’t be thinking; I need to bid cheap to get this – make sure you bid the price you want, otherwise you’ll gain no satisfaction by doing the job.
You also need to remember what kind of job you are capable of doing; there is no point in a one man band tendering for a university, as it’s not possible to complete on your own.
We did a tender for a hospital, back in 2012 – after 6 meetings, the job had changed so much from the original application we had to pull out, we just couldn’t do what they were asking, and we couldn’t afford the legal support to help us with our rights.
In 2014 we won a tender for a company with sites all-over the UK, which initially was fine. Unfortunately, about 2 thirds of the way through the job our contact left the company, and his boss took over. From this point on the details of the job began to change, to the point where we were expected to be on call 24-7. In the end we insisited we’d complete the agreed tender, and then would terminate the contract as they wanted to change it so much.
The problem with tenders is the client thinks of you like an employee, and in our experience they forget that we’re not that. They expect you at their beck and call and are unhappy when you don’t come running when they click their fingers.
This year we’ve had another issue; we completed a tender that asked for us to price per item based on the following (exact details changed but method the same):
- 1-100 items
- 101-500 items
- 501-1000 items
- 1000+ items
The price was on a per site basis, of which there were 60.
We would charge a rate for the first 100 items, then another rate for the next 399 and so on. So for example if it were £2 for 1-100 items, and £1.50 for the 101-500, and we did 200 items we would expect to charge £350.00.
It was at the point of our first invoice, that was rejected that they explained that in fact we were to charge in the ‘up to 500’ items bracket, so £300.00 would be the invoice.
Losing £50 wasn’t so bad, but consider the sites of 2000 items at 70p each; we were going to lose a lot of expected income.
We explained that that was not how the tender explained it, nor how we had priced the job. Such complications arise in tender processes.
So as you can see simply getting accepted for a tender doesn’t always mean an easy ride will follow; It’s always worth getting the tender checked by an expert just to be sure.
Don’t get me wrong, I’m sure there are plenty of companies that have been successful at winning tenders and have no problems at all, all I am saying to you is make sure you do your homework in advance, budget in for meetings if you need to and get a professional to check it over for you.